by sir_eson on 23rd August 2011, 10:58
VGMC Gold Trading Facility
August 22nd, 2011
Dear Shareholders
It has been a good run for many of us in the gold market in the past two weeks. Virgin Gold Mining Corporation (VGMC) as an entity with enormous interest in the gold industry is always bullish and supportive of a higher gold price. The higher the gold price is, the more valuable our corporation is and the richer our shareholders are. The inevitable events are that both gold and CPS prices will increase over the next few years.
Let me reaffirm everyone that VGMC’s number one principal or rather priority is to continue to pay good dividend to shareholders for the long run. Top dollar return for your capital at VGMC, in both dividend and capital appreciation.
The Gold Trading facility in VGMC was introduced and provided to shareholders in January 2010 to encourage them to get involved and learn more about gold. The Gold Trading facility and margin is not an obligation of the VG-CPS subscription package under our terms and conditions.
When a shareholder subscribes to 10,000 CPS, he/she owns 10,000 CPS and the company’s commitment is to return his/her dividend on time. All CPS subscription monies are invested by VGMC into income generating operations so that you are able to get a sustainable return (dividend) for your investment.
The Gold Trading margin is allocated to shareholders with VGMC taking full financial responsibility.
Currently:
1. Shareholders are able to trade gold without any deposit or premium. The money paid to subscribe to VG-CPS is invested into operations that are able to generate dividend for you every month; NOT as a down payment for your gold trading account.
2. No commission on every buy and sell trade.
3. No rollover commission.
We should ask ourselves: Is this a correct way of going forward for this corporation?
The company made a bit of money from the bigger spread (many complaints received) but now that we have so many shareholders with so many trades every day and a lot of carry forward trades, how can the company sustain in the long term?
Therefore, the board of directors has approved my proposal that effective 1st of September 2011:
1. All gold buy and sell trade will be subjected to a USD2.00 transaction fee per trade. Transaction fees will be deducted directly from your credit account.
2. A 5 minute holding or cooling time between buy and sell for the same transaction/trade will be applied.
3. A rollover rate will be implemented. Rates will be displayed. Rates will be about USD1/oz. per day, for example. Rollover rates will be deducted from credit accounts when the particular trade has been closed (sold).
We are currently giving a one to one ratio margin based on CPS subscription – gold trading. This means that the company is using all of the shareholders’ shares as a pledge/collateral for gold trading. If the gold market should fall by 50%, our corporation will lose 50% of our value. I do not want to lead this corporation bearing such risk. We cannot go forward hoping the gold price will keep going up. Whatever goes up will come down, that is inevitable.
I am serious about bringing VGMC public by 2015 and going public means our corporation cannot bear such risk.
We will see how things go after these implementations. If I feel that these measures are not enough, I may propose that we stop gold trading from VGMC effective 2012. It has to be a win-win situation. If VGMC loses money or takes enormous risks, it means your investment has been put at risk. Alternately, we may also set up a proper trading platform for shareholders to trade whereby the trading account is not pledged to VG-CPS.
However, speculative trading is like gambling; VGMC does not build wealth through speculative methods. If it comes in fast, it will be gone faster. Our shareholders are very enthusiastic about gold trading because they make good income out of it. I saw some of you made up to 20% in 2 weeks. Do you know how many portfolios/accounts out there received margin call and some wiped out completely when gold hit USD1814 per oz. and lost almost USD100 in 2 days? Our shareholders continue to make money with the VG Gold Trading platform because we give a 1-1 ratio with zero down payment and zero trading fees. Similarly if we allow you an unlimited margin, you will lose your entire portfolio. All your hard earned money and all your CPS shares that give you good dividend each month will be gone in 2 days! If we allowed every shareholder the unlimited margin as many requested, VGMC would have been in receivership (bankrupt) last week! Scary, serious and true.
Under my leadership, I want VGMC to focus on what we do best. Generate high dividend and capital appreciation. We are having more and more shareholders, thus we are having more and more funds at disposal. If we used to return 150m USD for 100 million shares easily; next year we have to return 1.3 billion dollars for 1 billion shares. If we lose focus on what we do best, we will lose our value going forward.
Please write to me (I read all your emails though I did not reply to most of them) and tell me what your thoughts are on VGMC giving up gold trading altogether. Or shall we set up an alternative trading platform? Do not be selfish; be pragmatic and please look at the big picture. Your response means a lot to me.
You are VGMC and VGMC is you. Thank you.
Kenneth Elinger
President and CEO of Virgin Gold Mining Corporation
